Market news

23 June 2022

S&P 500 opens with gains and reclaims 3770 on Powell's second day at the Congress

  • US stocks indices recover some ground after registering minimal losses on Wednesday.
  • S&P Global PMIs indices missed expectations, dragging equities lower.
  • The Nasdaq Composite leads the pack, followed by the S&P 500 and the Dow Jones.
  • The greenback recovers some ground though US Treasury yields are falling as traders backpedaled against an aggressive Fed.

US equities opened in the green as Wall Street began within familiar ranges, though S&P Global PMIs where the three indices missed expectations, stocks seesawed and pullback from daily highs, but resumed the upward recovery.

The S&P 500 has regained composure, rising 0.53%, up at 3,777.04, though shy of Wednesday highs around 3800. Meanwhile, the tech-heavy index, the Nasdaq 100, again leads the pack to the upside, gaining 0.90%, up at 11,151.78, followed by the Dow Jones Industrial (DJIA) climbing 0.37%, advancing 30,595.05

Digging into the broader market index, the leading sectors are Consumer Staples, up by 1.60%, followed by Utilities, and Health, each recording gains of 1.148% and 1.46%, respectively. In negative territory stays commodity-related sectors like Energy, Materials, and Industrials, dropping by 1.12 %, 0.75%, and 0.68% each.

The greenback has recovered some territory and edges towards 104.374, up by 0.18%. Meanwhile, US Treasury yields remain on the defensive, with the US 10-year Treasury yield tumbling 14 bps, yielding 3.018%, retreating from weekly highs near 3.317%.

On Thursday, the S&P Global PMIs for the US missed expectations, showing that business activity in the manufacturing and services sector is expanding but at a weaker pace after sliding to 52.4 from 57 (Mfg.) and 51.6 from 53.4 (Services), with the latter readings in May. In the meantime, US Federal Reserve Chair Jerome Powell speaks at the US Congress for the second consecutive day.

At the time of writing, the Fed Board Governor Michelle Bowman stated that another 75 bps rate hike in July would be appropriate, followed by at least 50 bps at next subsequent meetings.

In the commodities complex, the US crude oil benchmark, WTI, slides 0.75%, exchanging hands at $105.47 BPD. At the same time, precious metals like gold (XAU/USD) rise 0.23%, trading at $1842.70 a troy ounce.

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